FBR forms committees to boost falling revenues

Task forces will suggest measures in a report in the next 10 days.

ISLAMABAD:

With more than half of the original tax collection target yet to be achieved and just three months left in the current fiscal year, the Federal Board of Revenue (FBR) has constituted two task forces in a desperate bid to find ways to improve revenue collection and bring transparency in tax administration.

These bodies were formed on Tuesday by the FBR’s new chairman Ansar Javed, whose predecessor Ali Arshad Hakeem was pursuing a policy of enhancing revenues by netting tax evaders.

The task force on inland revenue will be headed by FBR Deputy Chairman Malik Abdul Samad while the task force on customs will be led by another Deputy Chairman Shahid Rahim Sheikh, say officials.

They will prepare a report in the next 10 days as both of them are going to retire by the end of April.

Like the deputy chairmen, the newly appointed FBR chairman will not stay much longer either as he will retire on May 15.

Former FBR chairman Ali Arshad Hakeem had created the posts of deputy chairman aimed at pacifying growing resentment against him. However, this did not work and Hakeem was restrained from carrying on by the Islamabad High Court and later on the government removed him and appointed a new chairman from within the tax service.

Member Inland Revenue (Operation) Raza Baqir, Member Strategic Planning Nisar Mohammad Khan and chief of IR policy will be the members of the inland revenue task force. Member customs, member strategic planning and chief tariff will be part of the task force on customs and will assist its chairman.

For the current fiscal year, the tax collection target was set at Rs2.381 trillion. In the first nine months, the FBR has only collected Rs1.17 trillion in revenues, which is less than half the target.

Declining revenues coupled with hefty power subsidies may force the budget deficit to a level far higher than the target. According to an Asian Development Bank report, this year Pakistan’s budget deficit is likely to be 7.5% of gross domestic product, excluding dues of power companies. The last parliament had set the target at 4.7%.

An unrealistic tax collection target due to economic slowdown, rampant corruption in the FBR and tax breaks offered to influential lobbies are said to be the main reasons behind the tax bureau’s inability to reach close to the target.

Sources revealed to The Express Tribune that during the last couple of years, almost all major operational positions in field offices of the FBR were given in return for kickbacks. The focus seemed to be more on achieving personal gains than collecting taxes.

“One of the stated aims of the task forces is to improve efficiency and bring more transparency in revenue administration,” said an FBR official.

After the ouster of the former FBR chairman, attempts were also made to dislodge Member IR Operation Raza Baqir, sources said. The member IR operation is responsible for all domestic taxes like income tax, sales tax and excise duty.

Last week, three more members were brought into the FBR, but two have not yet been given any position. Ijaz Hussain Shah has joined as member without portfolio. Similarly, Riffat Shaheen Qazi is also waiting for the allotment of a slot. For the time being, she will serve as a spokesperson.

Apart from these, Shahid Jatoi has been appointed member administration. According to sources, Haroon Tareen, who along with Jatoi, had played a significant role in removing Hakeem, is vying to be appointed as member IR operation.

Published in The Express Tribune, April 17^th, 2013.

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